10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2019

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 333-150952

China Media Inc.

(Exact name of registrant as specified in its charter)

Nevada	46-0521269
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Room 10128,  No. 269-5-1 Taibai South Road, Yanta District, Xi'an City, Shaan'xi Province, China	710068
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (86) 298765-1114

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days    [X] Yes    [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes    [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

[  ] Large accelerated filer Accelerated filer	[X] Non-accelerated filer
[X] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes   [X] No

As of February 14, 2020, the registrant had 39,750,000 shares of common stock outstanding.

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Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

The unaudited interim consolidated financial statements of China Media Inc. (the “Company”, “China Media”, “we”, “our”, “us”) follow. All currency references in this report are to U.S. dollars unless otherwise noted.

CHINA MEDIA INC.

DECEMBER 31, 2019

(UNAUDITED)

Financial Statement Index

Consolidated Balance Sheets as of December 31, 2019 (Unaudited) and June 30, 2019 

Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended December 31, 2019 and 2018 (Unaudited)

Consolidated Statements of Changes in Stockholders’ Deficit for the three and six months ended December 31, 2019 and 2018 (Unaudited)

Consolidated Statements of Cash Flows for the six months ended December 31, 2019 and 2018 (Unaudited)

Notes to the Consolidated Financial Statements (Unaudited)

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CHINA MEDIA INC.

CONSOLIDATED BALANCE SHEETS

			DECEMBER 31, 2019	JUNE 30, 2019
			(Unaudited)
Assets
	Current assets
		Cash and cash equivalents	$                1,987	$                2,603
		Other receivable, net of allowance of $116,428 and $118,145 at December 31, 2019 and June 30, 2019, respectively	3,294	3,780
		Other current assets	431	-
	Total current assets		5,712	6,383
		Fixed assets, net	14,521	14,736
		Operating lease right-of-use asset – related party	53,404	-
	Total assets		$  73,637	$     21,119
Liabilities and Stockholders' Deficit
	Current liabilities
		Accounts payable	$                  8,837	$   8,924
		Accrued liabilities and other payable	303,152	287,592
		Accrued liabilities – related party	43,352	73,270
		Operating lease liability, current – related party	55,421	-
		Due to related parties	797,147	717,974
	Total current liabilities		1,207,909	1,087,760
	Operating lease liability, non-current – related party		36,454	-
	Total non-current liabilities		36,454	-
	Total liabilities		1,244,363	1,087,760
Stockholders' deficit
		Common stock, $0.00001 par value, 180,000,000 shares authorized; 39,750,000 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively	398	398
		Additional paid-in capital	11,338,914	11,323,440
		Accumulated other comprehensive income	644,963	630,561
		Accumulated deficit	(13,155,001)	(13,021,040)
	Total stockholders' deficit		(1,170,726)	(1,066,641)
	Total liabilities and stockholders' deficit		$        73,637	$ 21,119

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
	FOR THE SIX MONTHS ENDED DECEMBER 31,		FOR THE THREE MONTHS ENDED DECEMBER 31,
	2019	2018		2019	2018
Selling, general and administrative expense	$ 118,441	$ 119,464		$ 60,758	$ 60,256
Impairment loss	-	729,001		-	729,001
Total operating expenses	118,441	848,465		60,758	789,257
Other expense
Interest expense	15,520	13,532		8,672	6,684
Net loss before income taxes	(133,961)	(861,997)		(69,430)	(795,941)
Income taxes	-	-		-	-
Net loss	$ (133,961)	$ (861,997)		$ (69,430)	$ (795,941)
Comprehensive loss
Net loss	(133,961)	(861,997)		(69,430)	(795,941)
Foreign currency translation adjustment	14,402	7,235		(26,881)	1,824
Comprehensive loss	$ (119,559)	$ (854,762)		$ (96,311)	$ (794,117)
Net loss per common share - basic and diluted	$ (0.00)	$ (0.02)		$ (0.00)	$ (0.02)
Weighted average number of common shares outstanding - basic and diluted	39,750,000	39,750,000		39,750,000	39,750,000
The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2019 (Unaudited)
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total Stockholders’ Deficit
	Shares	Amount
Balance, July 1, 2019	39,750,000	$                  398	$         11,323,440	$             630,561	$   (13,021,040)	$     (1,066,641)
Foreign currency translation adjustment	-	-	-	41,283	-	41,283
Imputed interest on related party loan	-	-	6,804	-	-	6,804
Net loss	-	-	-	-	(64,531)	(64,531)
Balance, September 30, 2019	39,750,000	$                  398	$         11,330,244	$             671,844	$   (13,085,571)	$   (1,083,085)
Foreign currency translation adjustment	-	-	-	(26,881)	-	(26,881)
Imputed interest on related party loan	-	-	8,670	-	-	8,670
Net loss	-	-	-	-	(69,430)	(69,430)
Balance, December 31, 2019	39,750,000	$                  398	$         11,338,914	$             644,963	$   (13,155,001)	$   (1,170,726)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2018 (Unaudited)
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total Stockholders’ Deficit
	Shares	Amount
Balance, July 1, 2018	39,750,000	$                 398	$         11,298,300	$             619,693	$   (12,056,334)	$   (137,943)
Foreign currency translation adjustment	-	-	-	5,411	-	5,411
Imputed interest on related party loan	-	-	6,801	-	-	6,801
Net loss	-	-	-	-	(66,056)	(66,056)
Balance, September 30, 2018	39,750,000	$                  398	$         11,305,101	$             625,104	$   (12,122,390)	$   (191,787)
Foreign currency translation adjustment	-	-	-	1,824	-	1,824
Imputed interest on related party loan	-	-	6,683	-	-	6,683
Net loss	-	-	-	-	(795,941)	(795,941)
Balance, December 31, 2018	39,750,000	$                  398	$         11,311,784	$             626,928	$   (12,918,331)	$   (979,221)
The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
				FOR THE SIX MONTHS ENDED DECEMBER 31,
				2019	2018
CASH FLOWS OPERATING ACTIVITIES
	Net loss			$                       (133,961)	$                      (861,997)
	Adjustments to reconcile net loss to net cash used in
	operating activities:
		Imputed interest		15,474	13,484
	Impairment loss on film costs			-	729,001
	Operating lease right-of-use asset – related party			8,102	-
	Changes in operating assets and liabilities:
			Accrued liabilities and other payable	19,565	38,400
			Operating lease liability – related party	1,431	-
Net cash used in operating activities				(89,389)	(81,112)
CASH FLOW FINANCING ACTIVITIES
			Proceeds from related party	88,816	77,758
Net cash provided by financing activities				88,816	77,758
Effect of exchange rate changes on cash and cash equivalents				(43)	(260)
NET CHANGE IN CASH AND CASH EQUIVALENTS				(616)	(3,614)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD				2,603	7,179
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD				$                             1,987	$                                3,565
SUPPLEMENTAL INFORMATION:
	Interest paid			$                                    -	$                                      -
	Income taxes paid			$                                    -	$                                   -
The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2019

NOTE 1. Description of Business

China Media Inc. (“we”, “our”, the “Company”, “China Media”), formerly Protecwerx Inc., was incorporated in the State of Nevada on October 16, 2007.

The Company does not conduct any substantive operations of its own; rather, it conducts its primary business operations through Vallant Pictures Entertainment Co., Ltd. (“Vallant”), its wholly owned subsidiary incorporated under the laws of the British Virgin Islands, which in turn, conducts its business through Xi’an TV Media Co. Ltd. (“Xi’An TV”). Effective control over Xi’An TV was transferred to the Company through the series of contractual arrangements without transferring legal ownership in Xi’An TV. As a result of these contractual arrangements, the Company maintained the ability to approve decisions made by Xi’An TV and was entitled to substantially all of the economic benefits of Xi’An TV.

Xi’An TV was incorporated in Xi’An, Shaan’xi Province, People’s Republic of China (“PRC”) and is in the business of investing, producing and developing film and television programming for the Chinese market.

NOTE 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited interim consolidated financial statements of China Media Inc. have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the year ended June 30, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2019 have been omitted.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television products, the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are made based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

Recent Accounting Pronouncements

On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease

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identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term.

The primary impact of applying ASC Topic 842 is the initial recognition of $92,000 of lease liability and $62,000 of right-of-use asset on the Company’s consolidated balance sheet as of July 1, 2019, for lease classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company’s leasing arrangement. There is no cumulative effect to retained earnings or other components of equity recognized as of July 1, 2019 and the adoption of this standard did not impact the consolidated statement of operations and comprehensive loss or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December31, 2019. See Note 4 for further discussion.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and has a working capital deficit as of December 31, 2019. The Company also generated negative operating cash flows and incurred net loss for the six months ended December 31, 2019.

These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of cooperation with other film and television producers, obtaining loans from shareholders and borrowing from Dean Li, the President and Chief Executive Officer of the Company, to fund operations. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

NOTE 3. Related Party Transactions

From time to time, the Company borrowed loans from Dean, Li, the President and Chief Executive Officer of the Company. As of December 31, 2019 and June 30, 2019, the Company owed Dean Li $797,147 and $717,974, respectively. The loans borrowed from Mr. Dean Li are unsecured, free of interest with no specified maturity date. The imputed interests are assessed as an expense to the business operation and an addition to the paid-in-capital and calculated based on annual interest rate in the range of 3.39%-4.15% with reference to one-year loan.

The Company has a five-year lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”) to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years and expiration date on December 31, 2022. Gede’s Legal Representative and Chief Executive Officer is a major shareholder of the Company. As of December 31, 2019, the Company had a right-of-use asset of $53,404 and lease liability of $91,875related to this lease. The Company also owed Gede rent payable of $43,352 for another lease that ended December 31, 2017. As of June 30, 2019, total rent payable owed to Gede was $73,270. See Note 4 for more details.

On December 11, 2018, the Company provided a guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700 when borrowed). The loan was pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”), a related party of the Company. See Note 5 for more details.

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NOTE 4. Operating Lease

On January 1, 2018, the Company entered into a lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”), a related party, to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years.

Balance sheet information related to the operating lease is as follows:

	December 31, 2019
Operating lease right-of-use asset – related party	$	53,404
Operating lease liability, current – related party	$	55,421
Operating lease liability, non-current – related party		36,454
Total operating lease liability	$	91,875

For the six months ended December 31, 2019, the Company had operating lease cost of $9,533 and the reduction in operating lease right-of-use asset – related party was $8,102. No cash was paid for amount included in the measurement of operating lease liability – related party during the six months ended December 31, 2019.

The weighted-average remaining lease term and the weighted-average discount rate of our lease are as follows:

	December 31, 2019
Weighted-average remaining lease term	3.00 years
Weighted-average discount rate	4.85%

The following table summarizes the maturity of our operating lease liability – related party as of December 31, 2019:

For The Years Ended June 30,
2020 (remaining)	$	48,089
2021		19,235
2022		19,235
2023 and thereafter		9,618
Total lease payment		96,177
Less imputed interest		(4,302)
Total lease liability – related party	$	91,875

NOTE 5. Commitments and Contingencies

On December 11, 2018, the Company entered into a guarantee agreement to provide guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700). The guarantee period is two years starting from the date the payment is due. The loan is pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”) in the amount of RMB 226,000,000 and 50 million equity interest in Hengtai’s two shareholders. The controlling shareholder of Senzhiyuan is also a principal shareholder of the Company.

The information of lease commitment is provided in Note 4.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

Results of Operations

Comparison of the six months ended December 31, 2019 and 2018:

	For Six Months Ended December 31,
	2019		2018
Operating expenses
Selling, general and administrative expense	$	118,441	$	119,464
Impairment loss		-		729,001
Total operating expenses		118,441		848,465
Other expense:
Interest expense		15,520		13,532
Total other expense		15,520		13,532
Net loss before income taxes		(133,961)		(861,997)
Income taxes		-		-
Net loss	$	(133,961)	$	(861,997)

Revenue and Cost

We had no sales and cost for the six months ended December 31, 2019 and 2018.

Operating expenses

During the six months ended December 31, 2019, our total operating expenses were $118,441, a decrease of $730,024 or 86% as compared to $848,465 for the six months ended December 31, 2018. The decrease was primarily due to decrease in impairment loss on film costs.

Net loss

For the six months ended December 31, 2019, we incurred a net loss of $133,961, as compared to a net loss of $861,997 for the six months ended December 31, 2018, a decrease of $728,036 or 84%. This decrease was primarily due to the decrease in operating expenses.

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Comparison of the three months ended December 31, 2019 and 2018:

	For Three Months Ended December 31,
	2019		2018
Operating expenses
Selling, general and administrative expense	$	60,758	$	60,256
Impairment loss		-		729,001
Total operating expenses		60,758		789,257
Other expense:
Interest expense		8,672		6,684
Total other expense		8,672		6,684
Net loss before income taxes		(69,430)		(795,941)
Income taxes		-		-
Net loss	$	(69,430)	$	(795,941)

Revenue and Cost

We had no sales and cost for the three months ended December 31, 2019 and 2018.

Operating expenses

During the three months ended December 31, 2019, our total operating expenses were $60,758, a decrease of $728,499 or 92% as compared to $789,257 for the three months ended December 31, 2018. The decrease was primarily due to decrease in impairment loss on film costs.

Net loss

For the three months ended December 31, 2019, we incurred a net loss of $69,430, as compared to a net loss of $795,941 for the three months ended December 31, 2018, a decrease of $726,511 or 91%. This decrease was primarily due to the decrease in operating expenses.

Liquidity and Capital Resources

The following table sets forth a summary of our cash flows for the periods indicated:

	For the Six Months Ended
	December 31,
	2019		2018
Net cash used in operating activities	$	(89,389)	$	(81,112)
Net cash provided by financing activities		88,816		77,758
Effect of exchange rate changes on cash and cash equivalents		(43)		(260)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(616)		(3,614)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		2,603		7,179
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,987	$	3,565

As of December 31,2019, we had cash of $1,987 in our bank accounts and a working capital deficit of $1,202,197.

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For the six months ended December 31, 2019, we used net cash of $89,389 in operating activities, compared to net cash used of $81,112 in operating activities during the same period of 2018. The increase of $8,277 for net cash used in operating activities was mainly due to the decrease in the change in accrued liabilities and other payablein this period.

During the six months ended December 31, 2019, we received net cash of $88,816 from financing activities, compared to net cash received of $77,758 in financing activities during the same period in fiscal year 2018. The increase of $11,058 in net cash provided by financing activities was due to the increase in loan from a related party.

Our cash level decreased by $616 during the six months ended December 31, 2019, compared to a decrease of $3,614 in the same period of 2018. The changes in cash were a result of the factors described above.

We anticipate that we will meet our ongoing cash requirements through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing and partnerships with finance groups on television and movie projects.

Critical Accounting Policies and Estimates

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 10-K for disclosures regarding our critical accounting policies and estimates. The interim financial statements follow the same accounting policies and methods of computations as those for the year ended June 30, 2019.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Audit Committee

The functions of the audit committee are currently carried out by our Board of Directors, who has determined that we do not have an audit committee financial expert on our Board of Directors to carry out the duties of the audit committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2019. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Changes in Internal Control

Except as discussed above, there were no significant changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that occurred during the quarterly period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

Item 5.  Other Information

None.

Item 6.  Exhibits

ExhibitNumber	Exhibit Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities ExchangeAct of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities ExchangeAct of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002

 SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	China Media Inc.
	(Registrant)
	/s/ Dean Li
Date: February 14, 2020	Dean Li
	President, Chief Executive Officer
	(Principal Executive Officer)

15

EX-31

Exhibit 31.1

Certification Of The Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dean Li, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of China Media Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

6.  The registrant's other certifying officer(s) and I have indicated in this report whether or not there were significant changes in internal controls or on other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  February 14, 2020

By:          /s/ Dean Li  

Dean Li

President, Chief Executive Officer

EX-31

Exhibit 31.2

Certification Of The Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ruijuan Hou, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of China Media Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

6.  The registrant's other certifying officer(s) and I have indicated in this report whether or not there were significant changes in internal controls or on other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  February 14, 2020

By:          /s/Ruijuan Hou   

Ruijian Hou

Chief Financial Officer, Principal Accounting Officer

EX-32

Exhibit 32.1

Certification Pursuant to 18 U.S.C. 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of China Media Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dean Li, Chief Executive Officer of the Company certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  February 14, 2020

By:          /s/Dean Li   

Dean Li

President, Chief Executive Officer

EX-32

Exhibit 32.2

Certification Pursuant to 18 U.S.C. 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of China Media Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ruijuan Hou, Chief Financial Officer of the Company certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  February 14, 2020

By:          /s/Ruijuan Hou 

Ruijuan Hou

Chief Financial Officer, Principal Accounting Officer

XML

Commitments and Contingencies

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 5. Commitments and Contingencies

On December 11, 2018, the Company entered into a guarantee agreement to provide guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700). The guarantee period is two years starting from the date the payment is due. The loan is pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”) in the amount of RMB 226,000,000 and 50 million equity interest in Hengtai’s two shareholders. The controlling shareholder of Senzhiyuan is also a principal shareholder of the Company.

The information of lease commitment is provided in Note 4.

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Operating Lease (Details) - USD ($)	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Disclosure Operating Lease Details Abstract
Operating lease right-of-use asset - related party	$ 53,404
Operating lease liability, current - related party	55,421
Operating lease liability, non-current - related party	36,454
Total operating lease liability	91,875
Operating Lease cost	9,533
Reduction in operating lease right-of-use asset - related party	$ 8,102
Weighted-average remaining lease term	3 years
Weighted-average discount rate	4.85%

XML

Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2019

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

NOTE 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited interim consolidated financial statements of China Media Inc. have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the year ended June 30, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2019 have been omitted.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television products, the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are made based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

Recent Accounting Pronouncements

On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term.

The primary impact of applying ASC Topic 842 is the initial recognition of $92,000 of lease liability and $62,000 of right-of-use asset on the Company’s consolidated balance sheet as of July 1, 2019, for lease classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company’s leasing arrangement. There is no cumulative effect to retained earnings or other components of equity recognized as of July 1, 2019 and the adoption of this standard did not impact the consolidated statement of operations and comprehensive loss or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 4 for further discussion.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and has a working capital deficit as of December 31, 2019. The Company also generated negative operating cash flows and incurred net loss for the six months ended December 31, 2019.

These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of cooperation with other film and television producers, obtaining loans from shareholders and borrowing from Dean Li, the President and Chief Executive Officer of the Company, to fund operations. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Selling, general and administrative	$ 60,758	$ 60,256	$ 118,441	$ 119,464
Impairment loss		729,001		729,001
Total operating expenses	60,758	789,257	118,441	848,465
Other income (expense)
Interest expense	8,672	6,684	15,520	13,532
Net income before income taxes	(69,430)	(795,941)	(133,961)	(861,997)
Income taxes benefit
Net loss	(69,430)	(795,941)	(133,961)	(861,997)
Comprehensive income
Net loss	(69,430)	(795,941)	(133,961)	(861,997)
Foreign currency translation gain (loss)	(26,881)	1,824	14,402	7,235
Comprehensive income (loss)	$ (96,311)	$ (794,117)	$ (119,559)	$ (854,762)
Net income per common share, basic and diluted	$ 0	$ (0.02)	$ 0	$ (0.02)
Weighted average number of shares outstanding-basic and diluted	39,750,000	39,750,000	39,750,000	39,750,000

XML

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning Balance at Jun. 30, 2018	$ 398	$ 11,298,300	$ 619,693	$ (12,056,334)	$ (137,943)
Beginning Balance (in shares) at Jun. 30, 2018	39,750,000
Foreign currency translation adjustment			5,411		5,411
Imputed interest on related party loan		6,801			6,801
Net income / (loss)				(66,056)	(66,056)
Ending Balance at Sep. 30, 2018	$ 398	11,305,101	625,104	(12,122,390)	(191,787)
Ending Balance (in shares) at Sep. 30, 2018	39,750,000
Beginning Balance at Jun. 30, 2018	$ 398	11,298,300	619,693	(12,056,334)	(137,943)
Beginning Balance (in shares) at Jun. 30, 2018	39,750,000
Foreign currency translation adjustment					7,235
Net income / (loss)					(861,997)
Ending Balance at Dec. 31, 2018	$ 398	11,311,784	626,928	(12,918,331)	(979,221)
Ending Balance (in shares) at Dec. 31, 2018	39,750,000
Beginning Balance at Sep. 30, 2018	$ 398	11,305,101	625,104	(12,122,390)	(191,787)
Beginning Balance (in shares) at Sep. 30, 2018	39,750,000
Foreign currency translation adjustment			1,824		1,824
Imputed interest on related party loan		6,683			6,683
Net income / (loss)				(795,941)	(795,941)
Ending Balance at Dec. 31, 2018	$ 398	11,311,784	626,928	(12,918,331)	(979,221)
Ending Balance (in shares) at Dec. 31, 2018	39,750,000
Beginning Balance at Jun. 30, 2019	$ 398	11,323,440	630,561	(13,021,040)	(1,066,641)
Beginning Balance (in shares) at Jun. 30, 2019	39,750,000
Foreign currency translation adjustment			41,283		41,283
Imputed interest on related party loan		6,804			6,804
Net income / (loss)				(64,531)	(64,531)
Ending Balance at Sep. 30, 2019	$ 398	11,330,244	671,844	(13,085,571)	(1,083,085)
Ending Balance (in shares) at Sep. 30, 2019	39,750,000
Beginning Balance at Jun. 30, 2019	$ 398	11,323,440	630,561	(13,021,040)	(1,066,641)
Beginning Balance (in shares) at Jun. 30, 2019	39,750,000
Foreign currency translation adjustment					14,402
Net income / (loss)					(133,961)
Ending Balance at Dec. 31, 2019	$ 398	11,338,914	644,963	(13,155,001)	(1,170,726)
Ending Balance (in shares) at Dec. 31, 2019	39,750,000
Beginning Balance at Sep. 30, 2019	$ 398	11,330,244	671,844	(13,085,571)	(1,083,085)
Beginning Balance (in shares) at Sep. 30, 2019	39,750,000
Foreign currency translation adjustment			(26,881)		(26,881)
Imputed interest on related party loan		8,670			8,670
Net income / (loss)				(69,430)	(69,430)
Ending Balance at Dec. 31, 2019	$ 398	$ 11,338,914	$ 644,963	$ (13,155,001)	$ (1,170,726)
Ending Balance (in shares) at Dec. 31, 2019	39,750,000

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2019	Feb. 12, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Current Fiscal Year End Date	--06-30
Entity File Number	333-150952
Entity Registrant Name	China Media Inc.
Entity Central Index Key	0001434674
Entity Tax Identification Number	46-0521269
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Room 10128, No. 269-5-1 Taibai South Road
Entity Address, Address Line Two	Yanta District, Xi'an City
Entity Address, City or Town	Shaan'xi Province
Entity Address, Country	CN
Entity Address, Postal Zip Code	710068
City Area Code	86
Local Phone Number	298765-1114
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Common Stock, Shares Outstanding		39,750,000

XML

Related Party Transactions

6 Months Ended

Dec. 31, 2019

Related Party Transactions

Related Party Transactions

NOTE 3. Related Party Transactions

From time to time, the Company borrowed loans from Dean, Li, the President and Chief Executive Officer of the Company. As of December 31, 2019 and June 30, 2019, the Company owed Dean Li $797,147 and $717,974, respectively. The loans borrowed from Mr. Dean Li are non-secured, free of interest with no specified maturity date. The imputed interests are assessed as an expense to the business operation and an addition to the paid-in-capital and calculated based on annual interest rate in the range of 3.39%-4.15% with reference to one-year loan.

The Company has a five-year lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”) to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years and expiration date on December 31, 2022. Gede’s Legal Representative and Chief Executive Officer is a major shareholder of the Company. As of December 31, 2019, the Company had right-of-use asset of $53,404 and lease liability of $91,875 of this lease. The Company also owed Gede rent payable of $43,352 for another lease that ended December 31, 2017. As of June 30, 2019, total rent payable owed to Gede was $81,823. See Note 4 for more details.

On December 11, 2018, the Company provided a guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700 when borrowed). The loan was pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”), a related party of the Company. See Note 5 for more details.

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Operating Lease

6 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Operating Lease

NOTE 4. Operating Lease

On January 1, 2018, the Company entered into a lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”), a related party, to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years.

Balance sheet information related to the operating lease is as follows:

	December 31, 2019
Operating lease right-of-use asset – related party	$	53,404
Operating lease liability, current – related party	$	55,421
Operating lease liability, non-current – related party		36,454
Total operating lease liability	$	91,875

For the six months ended December 31, 2019, the Company had operating lease cost of $9,533 and the reduction in operating lease right-of-use asset – related party was $8,102. No cash was paid for amount included in the measurement of operating lease liability – related party during the six months ended December 31, 2019.

The weighted-average remaining lease term and the weighted-average discount rate of our lease are as follows:

	December 31, 2019
Weighted-average remaining lease term	3.00 years
Weighted-average discount rate	4.85%

The following table summarizes the maturity of our operating lease liability – related party as of December 31, 2019:

For The Years Ended June 30,
2020 (remaining)	$	48,089
2021		19,235
2022		19,235
2023 and thereafter		9,618
Total lease payment		96,177
Less imputed interest		(4,302)
Total lease liability – related party	$	91,875

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Related Party Transactions (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Minimum [Member]
Range of Annual Imputed Interest Rate (as a percentage)	3.39%
Maximum [Member]
Range of Annual Imputed Interest Rate (as a percentage)	4.15%
Dean Li, President and Shareholder
Advance from Related party	$ 797,147	$ 717,974

XML

Description of Business

6 Months Ended

Dec. 31, 2019

Description Of Business

Description of Business

NOTE 1. Description of Business

China Media Inc. (“we”, “our”, the “Company”, “China Media”), formerly Protecwerx Inc., was incorporated in the State of Nevada on October 16, 2007.

The Company does not conduct any substantive operations of its own; rather, it conducts its primary business operations through Vallant Pictures Entertainment Co., Ltd. (“Vallant”), its wholly owned subsidiary incorporated under the laws of the British Virgin Islands, which in turn, conducts its business through Xi’an TV Media Co. Ltd. (“Xi’An TV”). Effective control over Xi’An TV was transferred to the Company through the series of contractual arrangements without transferring legal ownership in Xi’An TV. As a result of these contractual arrangements, the Company maintained the ability to approve decisions made by Xi’An TV and was entitled to substantially all of the economic benefits of Xi’An TV.

Xi’An TV was incorporated in Xi’An, Shaan’xi Province, People’s Republic of China (“PRC”) and is in the business of investing, producing and developing film and television programming for the Chinese market.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2019	Jun. 30, 2019
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	39,750,000	39,750,000
Common stock, shares outstanding	39,750,000	39,750,000

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2019

Disclosure Summary Of Significant Accounting Policies Policies Abstract

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying unaudited interim consolidated financial statements of China Media Inc. have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the year ended June 30, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2019 have been omitted.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television products, the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are made based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term.

The primary impact of applying ASC Topic 842 is the initial recognition of $92,000 of lease liability and $62,000 of right-of-use asset on the Company’s consolidated balance sheet as of July 1, 2019, for lease classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company’s leasing arrangement. There is no cumulative effect to retained earnings or other components of equity recognized as of July 1, 2019 and the adoption of this standard did not impact the consolidated statement of operations and comprehensive loss or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 4 for further discussion.

Going Concern

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and has a working capital deficit as of December 31, 2019. The Company also generated negative operating cash flows and incurred net loss for the six months ended December 31, 2019.

These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of cooperation with other film and television producers, obtaining loans from shareholders and borrowing from Dean Li, the President and Chief Executive Officer of the Company, to fund operations. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

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Operating Lease (Details 2)	Dec. 31, 2019 USD ($)
Disclosure Operating Lease Details Abstract
2020	$ 48,089
2021	19,235
2022	19,235
2023	9,618
Total	96,177
Less imputed interest	(4,302)
Total lease liability - related party	$ 91,875

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Operating Lease (Tables)

6 Months Ended

Dec. 31, 2019

Disclosure Commitments And Contingencies Tables Abstract

Schedule of Operating Lease

Balance sheet information related to the operating lease is as follows:

	December 31, 2019
Operating lease right-of-use asset – related party	$	53,404
Operating lease liability, current – related party	$	55,421
Operating lease liability, non-current – related party		36,454
Total operating lease liability	$	91,875

Schedule of Weighted-average remaining lease term

The weighted-average remaining lease term and the weighted-average discount rate of our lease are as follows:

	December 31, 2019
Weighted-average remaining lease term	3.00 years
Weighted-average discount rate	4.85%

Schedule of maturity of operating lease liability

The following table summarizes the maturity of our operating lease liability – related party as of December 31, 2019:

For The Years Ended June 30,
2020 (remaining)	$	48,089
2021		19,235
2022		19,235
2023 and thereafter		9,618
Total lease payment		96,177
Less imputed interest		(4,302)
Total lease liability – related party	$	91,875

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS OPERATING ACTIVITIES
Net loss	$ (133,961)	$ (861,997)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Imputed interest	15,474	13,484
Impairment loss on film costs		729,001
Operating lease right-of-use asset - related party	8,102
Changes in operating assets and liabilities:
Accrued liabilities and other payable	19,565	38,400
Operating lease liability - related party	1,431
Net cash provided by (used in) operating activities	(89,389)	(81,112)
CASH FLOW FINANCING ACTIVITIES
Proceeds from related parties	88,816	77,758
Net cash used in financing activities	88,816	77,758
Effect of exchange rate changes on cash	(43)	(260)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(616)	(3,614)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR	2,603	7,179
CASH AND CASH EQUIVALENTS AT END OF THE YEAR	1,987	3,565
SUPPLEMENTAL INFORMATION:
Interest paid
Income taxes paid

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CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Current assets
Cash and cash equivalents	$ 1,987	$ 2,603
Other receivable, net of allowance of $116,428 and $118,145 at December 31, 2019 and June 30, 2019, respectively	3,294	3,780
Other current assets	431
Total current assets	5,712	6,383
Fixed assets, net	14,521	14,736
Operating lease right-of-use asset - related party	53,404
Total Assets	73,637	21,119
Current liabilities
Accounts payable	8,837	8,924
Accrued liabilities and other payable	303,152	287,592
Accrued liabilities - related party	43,352	73,270
Operating lease liability, current - related party	55,421
Due to related parties	797,147	717,974
Total current liabilities	1,207,909	1,087,760
Operating lease liability, non-current - related party	36,454
Total liabilities	1,244,363	1,087,760
Stockholders' equity
Common stock, $0.00001 par value, 180,000,000 shares authorized; 39,750,000 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively	398	398
Additional paid-in capital	11,338,914	11,323,440
Accumulated other comprehensive income	644,963	630,561
Accumulated deficit	(13,155,001)	(13,021,040)
Total stockholders' equity	(1,170,726)	(1,066,641)
Total liabilities and stockholders' equity	$ 73,637	$ 21,119